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The Natural Drinks Company

Platform:
Crowdcube
Stage:
Expansion
Industry:
Food & Drink
Location:
UK - North West
Date Rated:
20/11/17
Raise:
£750,000
Equity:
6.98%
Valuation (Pre Money):
£9,994,986
Industry: Food & Drink
Location: UK - North West
Platform: Crowdcube
£750,000 Expansion
Valuation: £10,744,986
Date Rated: 14/11/17

MANAGEMENT

PRODUCT

INVESTMENT
Tax Status: EIS

Business Summary

The Natural Drinks Company aims to create delicious, all-natural, sugar-free drinks, an alternative for people who wants to be healthier. The Natural Drinks Company has sold 4.4m bottles in the last 18 months and is close to launching the next product. This round of investment will be used to fund the marketing campaign and the launch of a new range of products.

Financial Overview

Apr-21
Date (y/e) Apr-17 Apr-18 Apr-19 Apr-20 Apr-21
Sales Apr-17£454,549 Apr-18£776,860 Apr-19£6,886,915 Apr-20£13,329,354 Apr-21£20,366,985
Gross Profit Apr-17£36,459 Apr-18£191,287 Apr-19£3,275,627 Apr-20£6,558,730 Apr-21£10,189,595
GP as % sales Apr-178% Apr-1825% Apr-1948% Apr-2049% Apr-2150%
Overheads Apr-17£454,605 Apr-18£1,128,847 Apr-19£2,726,641 Apr-20£3,859,961 Apr-21£5,962,006
Operating Profit Apr-17-£418,146 Apr-18-£937,560 Apr-19£548,986 Apr-20£2,698,769 Apr-21£4,227,589
OP as % sales Apr-17-92% Apr-18-121% Apr-198% Apr-2020% Apr-2121%
Closing Cash Apr-17£46,736 Apr-18£250,201 Apr-19-£808,869 Apr-20£1,386,967 £4,504,180

Note: This financial information has been sourced from the company on 14/11/2017. Financial data is NOT verified by Wheatfromchaff Ltd.
72%
SKILLS:
EXPERIENCE:
COMMITMENT:
Although the management team is complete with every key role covered, further marketing and sales expertise will be needed to help the company scale at the pace intended.
The team combine management and start-up experience and they are supported by a successful Chairman and an experienced advisory board.
The Founders have invested £300k into the business to develop the flavors and most of the team appear to be full time.
59%
MARKET:
PRODUCT:
COMPETITION:
The UK soft drinks market is worth over £15bn, of which low and zero-calorie soft drinks sales represent £1.8bn with rising demand for drinks made with all-natural ingredients.
TNDC has achieved initial commercial traction but it is still dependent on one product and one retail client and the new product lines are experiencing delays on their launch.
The beverage industry is experiencing major changes shifting to healthier ingredients and the company is focusing its offering on Stevia, the preferred sugar-substitute in the market currently.
34%
PROFITABILITY:
CASHFLOW:
RETURNS:
The increase in gross margin seems unlikely with supermarket deals in the pipeline and the forecast seems ambitious but it is supported by substantial marketing expenditure.
Given the expected high leverage of trade debtors, this round of investment may not prove to be enough unless overheads are reduced, which may jeopardise the forecast growth.
The valuation seems very high given current sales and only if the product does gain the planned traction, investors could expect reasonable returns on exit within four years.


Conclusion

The Natural Drinks Company is currently very dependent on one retail client, Iceland, however, the team will be meeting shortly with two major supermarkets to secure further listings.

The low and sugar-free drinks market is becoming increasingly crowded and many well-backed players are and could offer similar products, however, given the acquisition appetite from major brands if the company gains sufficient commercial traction, it could become an attractive target.

Related Links

Crowdcube Pitch

thenaturaldrinks.co

 

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The Ratings we publish have been approved and issued at Financial Promotions in the United Kingdom by Wheatfromchaff in the United Kingdom who is Authorised and Regulated by the Financial Conduct Authority FRN: 751017. Wheatfromchaff Limited registered office is Kilver Court, Kilver Street, Shepton Mallet, Somerset, BA4 5NF and telephone number +44 (0) 1749 347 577. Telephone calls may be recorded. VAT No: 214 0196 49

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